analyze an organization (ba)

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Introduction

1.0 INTRODUCTION British Airways is the world's second biggest international airline, carrying more than 28 million passengers from one country to another. In addition, it has always been regarded as an industry-leader. While British Airways is the world's second largest international airline, because its US competitors carry so many passengers on domestic flights, it is the fifth biggest in overall passenger carryings (in terms of revenue passenger kilometres). There was a significant drop in both passengers and cargo carried as a reflection of the difficult trading conditions resulting from the weakening of the global economy, the impact of the foot and mouth epidemic in the UK and effects of the September11th US terrorist attacks. A further element in the airline's future profitability has been the formation of its global alliance. The launch of the one world alliance in February 1999 was an important step forward in introducing benefits to our customers around the world. British Airways joined with American Airlines, Qantas, Canadian Airlines and Cathay Pacific in offering a range of co-operative measures designed to provide a seamless world network. Iberia and Finnair joined in September 1999 and Aer Lingus and LanChile joined in June 2000. Canadian Airlines withdrew from the alliance in June 2000 following a merger with Air Canada. The airline's strategy for the future is focused on development of the American Airlines relationship, leading to deeper bilateral relationships within the one world alliance. (http://media.corporate-ir.net/) 2.0 EXTERNAL ENVIRONMENT 2.1 PORTER'S FIVE FORCES ANALYSIS ON BRITISH AIRWAYS Firms analysing whether they should enter a market or assessing whether they should be in the market at all mainly use the model. However as firms operate in a dynamic environment, it can also be used to try and figure out what areas of the industry can be improved to make it more profitable. ...read more.

Middle

Swissair/Sabena filed for bankruptcy protection. (http://solidarity.igc.org/atc/95Ward.html) The intensity of rivalry of the European airline industry makes it a challenge for any player to respond to the broad spectrum. British airways no longer enjoy the benefits of London Heathrow airport (www.britishairways.co.uk). Since 1998 many airlines implemented variety of innovation to lure passengers, especially business travellers. For example Air Canada in 1998 opened its own Lounge in London Heathrow's Terminal 3, where passengers can enjoy special benefits like showers, show polishing, cloth pressing services, breakfast and Xerox business centre with telephone, fax and internet. This lounge is open to Air Canada most frequent travellers regardless of them flying business or economy class. (http://www.airlinequality.com/Product/AC-SAS-lnge.htm) Local authorities also encourage carriers to fly to minor airports of the countries to uphold tourism industry via subsidies. Other airlines have entered strategic alliances to pool their resources, existing routes and expertise. When analyzing competition it is necessary to outline, that one airline's competitors are not only other airlines operating on this route, but airlines that fly to other destinations, trains. Other competitors are personal cars of the people, who intend to travel. Taking into account these factors it is possible to say, that rivalry in the airline industry is very aggressive at the moment and for any airline company it is necessary to upgrade its strategy on the continuous basis to compete successfully on the market. 3.0 PEST ANALYSIS ON BRITISH AIRWAYS PEST factors are the four broad categories of influences that create the marketing environment: sociocultural, technological, economic and competitive, political and legal. (Brassington and Pettitt, 2003) 3.1 Political The political arena has a huge influence upon the regulation of businesses, and the spending power of other businesses. ...read more.

Conclusion

In general, the lower the company's reliance on debt for asset formation, the less risky the company is since excessive debt can lead to a very heavy interest and principal repayment burden. However, when a company chooses to forgo debt and rely largely on equity, they are also giving up the tax reduction effect of interest payments. (http://www.investorwords.com/1326/debt_ratio.html) Net debt at the year end amounted to �5,149 million, including convertible bonds of �112 million, and net of cash and short term loans and deposits totalling �1,652 million. This reduction in net debt of �1,145 million from last year resulted from additional cash, short-term loans, deposits, and exchange effects. Debt repayments were partially offset by new loans and finance leases taken out. The net debt/total capital ratio stood at 60.7 per cent, a 5.3 point reduction versus last year mainly due to the reduction in net debt. Including obligations under operating leases, net debt was 64.2 per cent, a 4.9 point reduction from last year. (http://media.corporate-ir.net/media_files/irol/69/69499/ar2003_final.pdf_) 6.0 CONCLUSION A detailed analysis on the British Airways was conducted involving a SWOT analysis, a PEST analysis and Porter's five forces analysis. We also used financial analysis ratio in order to show how the terrorist attack of September 11th influenced all kinds of industries. We have considered all the external and internal environment factors that affected British Airways and we realised that although is a well known airline industry it still has its limitations. The airline industry is monopolistic competition as airline companies' focus on particular segments. As an airline industry, British Airways is facing competition and it faces a downturn in economy. It has the latest check-in technology and the relationships between the staff members are good. Overall, it is the world's second biggest international airline and has always been regarded as an industry-leader. (http://media.corporate-ir.net/) 7. ...read more.

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